Hospitals experienced the first financial impact of the Centers for Medicare & Medicaid Services (CMS) Value-based Purchasing (VBP) Program in Fiscal Year 2013. Since then, it has evolved in complexity and financial risk and continues to be a key strategy in the U.S. Department of Health & Human Services’ goal of tying 90 percent of Medicare traditional payments to quality or value by 2018.
What makes VBP a challenge for hospitals is the complexity of the methodology and the evolution and maturity of the measures. The measures are evolving to be more reflective of quality, efficiency and patient centeredness. The latest patient centeredness measure is an aggregate of three measures that adds a transition-of-care component.
Additionally, while the calendar may say March 2016, for VBP we are well into the FY 2018 program and performance period. What that means is that your organization’s performance today will impact FY 2018 reimbursement either through an incentive payment or penalty.
Though we are in a new performance period there is still time to determine if your organization has evolved its priorities simultaneously with the FY 2018 program and implemented the strategies required to minimize the financial risk. If not, you need to get started now. Here’s how.
1. Leaders must lead the way. VBP is not only difficult to understand, it is complex to manage and no individual department such as quality or nursing can do this in a vacuum. Create a burning platform by setting it as a priority and educating all stakeholders on the program. Don’t assume they understand or keep up with all the changes that occur every year.
Leaders must also be transparent with performance data and the financial impact so everyone understands why certain measures are set as a priority for improving over others. While patient care must be front and center, there is a financial impact to care that every provider must understand in order to be a part of the solution.
2. Understand what you can impact now. Measurement periods, baseline and performance, are not equal, therefore consider each individually to understand what measures you can impact within the given window of time. Here are important considerations as you develop your improvement strategy:
- For indicators with performance periods ending in June, such as 30-day mortality and Patient Safety Indicator-90, you must consider the complexity of implementing new processes that would yield measureable change in just a few months. Realistically assess if you can “move the needle” in order to impact FY 2018 VBP performance.
- Assess the gap between your baseline and performance values and the benchmark (top 10 percent) because you may have an opportunity to earn improvement points instead of achievement points
- Identify measures where you are close to a new threshold (national median) or benchmark and prioritize those areas for improvement. Reaching this next milestone will pay off.
3. Foster interprofessional collaboration. The addition of Medicare Spend per Beneficiary (MSPB), with a weight of 25 percent and its expansion into post-acute resource utilization, is one example where the increasing complexity requires interprofessional collaboration to make sustainable improvements. In a broader sense, MSPB is an example of CMS moving hospitals toward episode-based payment models even when they weren’t prepared to assume the additional risk of post-acute resource utilization. These complexities require everyone to work together.
MSPB redefines the episode of care within VBP by extending the hospital’s financial risk to three days pre- and 30 days post-hospital admission. As a result, hospitals must start assuming responsibility for where they discharge patients, even if those providers are not a part of their system. MSPB claims data is a great resource to start connecting the dots between quality, utilization, post-acute providers and spend. For many organizations, this information has not been available in the past so important new insights can be gained from its analysis.
In the MSPB example, it is essential for finance, operations and clinical leaders to work together. Claims data must be analyzed to prioritize areas of focus. Critical comparisons of each post-acute provider must be completed to identify variations in quality, readmissions and spend for specific patient populations. Once understood, they can’t wait until their system “owns” all providers to start conversations and implement strategies to align with those that deliver the highest quality and most efficient care.
Continued partnership is required to identify referral pattern variations and work toward consistency based on patient need. In addition, they must understand the impact of hospital-acquired conditions on post-acute resource utilization. Lastly, developing mature palliative care programs and community partnerships to manage complex patients is essential to assure resources are utilized based on each patient’s wishes.
4. Use a FY 2018 VBP calculator to prioritize opportunities, develop an individualized improvement strategy and monitor performance changes. Creating a VBP financial model to start to understand your individual performance and associated financial risk is complex. The complexity is a result of the underlying methodology and the multifaceted changes every fiscal year: measures may sunset, new measures added and risk models, domains and associated weights may change.
A VBP calculator developed for the specific fiscal year enables easy modeling so you gain insight into where to prioritize improvement efforts to gain the greatest return. When considering and comparing calculator tools, look for the ability to adjust data points, such as:
- Medicare reimbursement
- Baseline and performance values
- Case volumes
- Linear exchange slope
VBP is one program that is forever changing the Medicare payment equation. Hospitals will no longer be paid for how much care they provide a patient. Instead, reimbursement will be impacted based on how well the patient did after receiving care and how efficient the care was delivered in the acute and post-acute setting. This is an evolution for our industry and the program and measures are expected to evolve through FY 2021. Leaders must establish priorities and support those trying to implement real, sustainable change. They must understand their organization’s capabilities and opportunities, embed a culture of interprofessional collaboration and use data to not only know where they are today but to prioritize where they will focus tomorrow. These are vital components to developing a successful VBP strategy.
